Focus on Risk Adjustment


Focus on Risk Adjustment: the State of New Jersey Bases Medicaid Funding on Risk Adjustment for Chronic Disease


Health care resource consumption in chronic disease can be very high. The State of New Jersey is using a Risk Adjustment Payment Model in an attempt to fairly distribute Medicaid funds in proportion to severity of illness.  Horizon NJ Health is required to submit encounters to the State of New Jersey as an estimate of the prevalence of disease in the population we serve. Encounters are the only acceptable form the State uses to recognize chronic illness.


Encounters should be filed for every member service or visit even if the service is capitated.


Our Risk Adjustment Program is based on the guidelines for the State of New Jersey.  Clinical staff review submitted encounters to identify high risk members with chronic illness. We are reviewing the encounter forms for the appropriate chronic illness diagnosis codes. The expectation is that the codes will be indicated on a biannual basis, at a minimum. It is important to document chronic illness diagnoses on every submitted encounter when appropriate to ensure they are captured.

When a member visits for an acute condition and a chronic issue is relevant or discussed, we ask that this is documented in the medical records <>and on the encounter form.  For example, illnesses such as cerebral palsy or diabetes, should always be coded on the encounter form, as we know these types of diagnoses are usually addressed in some capacity at every visit.  Also, in addition to the V codes submitted at the time of an annual check-up, all chronic illnesses need to be submitted on the encounter form as well.

Remember to:

  • Encourage members to visit regularly
  • Document and submit complete encounter forms with the chronic illness codes
  • Submit an encounter form to Horizon NJ  Health, even if the member has another primary insurance provider
  • All participating providers are required to submit encounter forms, including those for capitated services.

All participating providers are required to submit encounter forms, including those for capitated services.

Horizon NJ Health is working diligently to ensure that our members visit their providers regularly, so you can help them maintain health and also, for those with chronic illness, help prevent or delay complications.

For more information on Risk Adjustment, visit the Chronic Illness and Disability Payment System (CDPS) website.

Horizon NJ Health strives to assist you in providing quality medical care to our members. If you have any questions about Risk Adjustment, please call our Risk Adjustment Nurse at 609-718-9625 or email